Interra Resources, a Singapore-listed oil firm, has found itself in the midst of controversy as its shares were suspended from trading on the Singapore Exchange (SGX) on February 6. The suspension came at the company's own request before the market opened on that Thursday. This action follows allegations from the Justice for Myanmar report, which accused Interra of supplying over 2 million barrels of oil valued at more than US$150 million to Myanmar's junta, fueling concerns about its operations in the politically unstable region.
Interra holds a significant interest of approximately 60% in Goldpetrol Joint Operating Company (GJOC), which manages two onshore oil fields in Myanmar. This venture secured a production-sharing contract with Myanma Oil and Gas Enterprise (MOGE) in 1996, which was extended for 11 years in April 2017. Importantly, this agreement predates the military coup in Myanmar that took place in early 2021. Despite the turmoil following the coup, GJOC has continued operations under unchanged improved petroleum recovery contracts.
The Justice for Myanmar report has shed light on the situation by alleging that Interra's activities have inadvertently supported the military junta's actions. It claimed that "production was suspended for two months in early 2021 after the coup attempt, but the company has since ramped up output." This increase in production, according to the report, has "fuelled its ongoing war crimes."
Interra has categorically rejected these allegations, describing them as a "sensationalisation" of facts. The company defended its position by stating that it is "erroneous" to suggest any such increase is linked to the junta's activities. Interra emphasized that GJOC's gross oil production in Myanmar has remained "largely consistent," dismissing claims of any significant changes post-coup.
In response to these allegations and the subsequent trading suspension, Interra is actively seeking legal advice to ensure its compliance with foreign laws. The company has expressed its intention to request the lifting of the trading suspension once it gains clarity on these compliance issues.
Since the military coup in Myanmar, the country has been embroiled in political and social unrest. In response to these developments, the Monetary Authority of Singapore (MAS) has been engaging with Singapore's financial institutions to implement measures aimed at guarding against money laundering and terrorism financing risks originating from Myanmar. The United States and European Union have also imposed sanctions on MOGE, Myanmar's state oil and gas enterprise.
Singapore's Ministry of Foreign Affairs (MFA) has also commented on this complex situation. It stated that Singapore has been "very careful to avoid inadvertently causing greater hardship" for Myanmar's population. This reflects a cautious approach from Singapore as it navigates diplomatic and economic ties with Myanmar amidst heightened tensions.
Interra Resources' current predicament underscores the challenging business environment in Myanmar, exacerbated by political instability and international scrutiny. While the company maintains its stance against the allegations, it must navigate these choppy waters and work towards resolving its compliance issues.
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